New Delhi: The mutual fund industry witnessed an over 6% drop in its assets under management for the second consecutive month in July, led by country’s top fund house Reliance MF, which lost over Rs6,000 crore in the period.
The combined average assets under management (AUM) of the 34 fund houses in the country dropped to Rs5,29,629.46 crore in July, as compared to Rs5,64,752.76 crore in June, according to the data released by the Association of Mutual Funds in India (AMFI).
Analysts believe the bearish sentiments in the market and hardening of interest rates led to heavy redemptions last month leading to the sharp drop in average assets under management.
“The sharp drop in AUMs has been entirely due to heavy redemptions from investors during the month amid the volatility in the stock market...this shows investors are beginning to get impatient,” mutual fund tracking firm Value Research Online CEO Dhirendra Kumar said.
Reliance MF registered the biggest drop of over Rs6,200 crore in its average Assets under Management (AUM) in July.
However, despite the drop, Reliance Mutual Fund continues to be the top fund house in the country with assets valued at Rs84,563.91 crore last month, against Rs90,813.45 crore in the previous month.
“The stock market have been suffering in the month as the market value of investment is on the decline and the hardening of interest rates has made its difficult for banks and corporates to keep their surplus cash in income schemes, which led to withdrawal of funds from them,” Taurus Mutual Fund Managing Director R K Gupta said.
ICICI Prudential, the second largest mutual fund, witnessed a loss of Rs4,313 crore in its assets at Rs55,160.66 crore in July, from Rs59,473.58 crore in June.
HDFC Mutual Fund, which beat state-run UTI MF to notch the third slot in June, reported an average AUM of Rs50,752.03 crore in July, down from last month’s Rs52,710.80 crore.
UTI Mutual Fund continued its fall in the average AUM, which was Rs46,119.91 crore at the end of July, down 9.16% from June’s figure of Rs50,770.57 crore.
Besides, AUM of Franklin Templeton MF stood at Rs24,440.94 crore in July, against Rs24,742.06 crore in the previous month.
Meanwhile, about eight fund houses managed to increase their assets under management in July which include — ABN Amro MF, Benchmark MF, JP Morgan, Lotus India and Mirae Assets.